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Sales of Real Estate (to siblings) in Probate

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investor_47

Junior Member
What is the name of your state? Indiana

How are real estate closing costs typically handled when a sibling buys out the real estate of (in this case 2) other siblings? Who pays what?

Thanks!What is the name of your state?
 


nextwife

Senior Member
All three have 1/3rs interest? The sellers each pay their share of the seller side closing costs that are standard for that area, and the buyers pays their closing costs as the buyer.

Example: in my market, the seller is responsible to pay the Owners Policy of Title Insurance, the State transfer tax, prorations, municipal code compliance inspection costs, and the cost of preparing the closing statement on the seller side, and the disbursing fees if a cash closing, while the buyer pays for the title loan policy, the lender closing fee, the buyer prorations, and the mortgage recording fees, etc.

So, whatever protocol in your market dictates is a seller cost, the two sellers would split, and whatever is a buyer cost, the buyer pays, proportionate to their interest.
 

investor_47

Junior Member
Closing fees

Yes, each has 1/3 interest.

Following the practices of the local market and splitting the cost of the typical seller's costs, while the buyer pays the typical buyer's costs seems to be fair and equitable.

Fair and equitable are both very important to me. But, perhaps like many estate situations, there are a lot of emotions involved and not everyone really understands finance particularly well.
 

nextwife

Senior Member
Perhaps if they call a title company in their county and ask what the sellers should expect to pay for when they transfer real estate, the title closing office can review what they should expect? The title office reps here do that. Whether they "sell" their interest now, or later, they still, as sellers, would normally incur the seller costs eventually.

Having received ownership by inheritance does not mean that the new owner is exempt from paying seller side costs when they eventually sell. In some states, the transfer tax might be excluded in a transfer to a sibling, but I don't specifically know Indiana RE law.
 
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